Realtors’ Bowl-a-Thon for Lifeline for Children

     
Each summer the Savannah Board of Realtors hits the lanes for its annual Bowl-a-Thon to raise money for Lifeline for Children.  Lifeline for Children is a program of the Department of Family & Children’s Services and serves more than 300 children in Chatham County foster care.  The event draws hundreds of area Realtors from a score of brokerages to generate Lifeline’s biggest annual charity donation.  An estimated $3000 is raised to provide whatever the kids need --- whether it’s clothes, school supplies, toys, or some other necessity.  The family atmosphere and good-natured ribbing help Realtors get over the fact that the bowling score of the average Realtor rarely breaks 100.  Thank goodness we are so much better at selling homes!

Pooler GA Home Prices Not Yet Tied to Inventory

Pooler, GA, is a suburb of Savannah and has been named the fastest growing city in Georgia.    Given that Savannah has the ocean to the east and the Savannah River and South Carolina to the north, any residential growth has occurred in the south/southwest or west.  Pooler, located in West Chatham County, has been the hub of new home construction for the last few years, slowing down a bit during the "real estate bust,” but certainly strengthening now.  Commercial growth in the form of retail, restaurants, and family-oriented recreation have matched pace with the residential growth, making Pooler a highly desirable area for buyer who are searching for new homes.  All in all, home sales have been relatively strong, boosted by the new construction activity.
National real estate industry reports have touted recent price appreciation in markets across the country.  Nevertheless, all real estate is local.  In the Savannah area market, this would translate to hyper-local, with some neighborhoods maintaining price stability and others increasing.   There have always been some basic “rules” governing real estate economics:

• A balanced market is generally defined as having a 6 months’ supply of inventory, i.e., homes available for sale.  The inventory supply is calculated based on how many homes sell in a given month, compared to how many are available.
• During the last few “bust” years, inventory in Savannah area neighborhoods ranged from a low of 12 months’ supply to a high of almost three years’ supply.
• NAR studies show that the turn-around inventory is around 10 months.  In other words, when the supply gets that low, the trajectory of the trend is market recovery.  In the last year, a good number of Savanna neighborhoods hit or surpassed that marker.

Why all the focus on supply of inventory?  It’s basic economics.  When the market is balanced, neither the buyer or seller has dominance in negotiating terms of a sales transaction.  As inventory drops below that 6 month marker, the negotiating power tips to the seller side of the deal because the buyer has fewer homes from which to choose.  Basic supply and demand.  It is during this scenario that prices begin to push higher.  The increase in price and a corresponding increase in the mortgage rates are a one-two punch that affects home affordability.
The interesting thing about Pooler is that it is currently defying the economic “rules.”  And that spells opportunity for local buyers.  Let me explain.  Pooler was least hit in the local real estate “bust,” climbing to a high around 15 months’ supply of inventory.  However, since January 2012, the supply (re-sale and new construction) has continually dropped from 9 months to the most recent supply number of just under 2 months in July 2013.  So, following the basic rules, the expectation would be that the prices would already be shifting upwards.  Makes sense, right?  Well, that’s not what is happening.  Over the last 19 months, the price has either remained constant or dropped in the 1-2% range.  The shift is not being driven by the construction of smaller homes.  If anything, local builders are offering larger homes without larger prices.  The bottom line is that the savvy buyer has a short window of opportunity to take advantage of the Pooler prices.  Any buyer currently sitting on the fence watching the mortgage rates needs to shift his/her gaze to the price situation.  Carpe diem, buyers!

Today’s Savannah Tourist: Invasion of the Canadian Geese

Let’s face it.  Savannah is a tourism town.  The summer months bring tens of thousands of visitor who experience what the area has to offer.  While I’m used to seeing tourists enjoying the downtown areas, I was a little surprised to find a different kind of visitor yesterday afternoon.. 
One of the many green spaces available in Savannah is Southside’s Lake Mayer.  Lake Mayer is a hub of over a mile of jogging track, a huge lake which is used for fishing and sailing lessons, multiple lit tennis courts which are home to both casual and tournament play, open air and screened buildings for gatherings, and tons of areas for pets and picnics.  The park is a popular spot for reunions, festivals, political gatherings, and much more.
Yesterday my business travels took me past Lake Mayer and, as I glanced over, I saw a virtual wall of alternative visitors --- Canadian geese.  There were so many, I turned the car around for a better look.  Wherever you looked, geese were there, getting along with the Lake’s locals.  Driving slowly through the geese was treacherous.  They moved, but certainly took their time about it.  This picture doesn’t do the scene justice.
   

What is a bungalow?

Savannah is home to many architectural styles and one of the most popular is the bungalow.  Perhaps the highest concentration of Arts & Crafts style bungalows are found in Ardsley Park, the unofficial designation for a neighborhood made up of more than a dozen wards.  It is located in the heart of the city, with numerous parks and green spaces, and is highly desired among young families. The majority of these homes were constructed in the 1940’s and have gone through at least one round of updating or renovation.   Often, buyers have asked, “What makes a house a bungalow?”
The term actually precedes the Arts & Crafts movement in America.  In fact, “bungalow” was used as far back as the late 1600’s to describe detached, single story homes with wide verandas.  The description has been used to describe a variety of styles all across the globe.  So, in Savannah, what makes a bungalow a bungalow?
The Visual Dictionary of American Domestic Architecture by Rachel Carley is the best source I’ve discovered that displays the most common features, including:

• One or one-and-a-half story detached home
• Wide veranda or deep porch, with dwarf piers
• Often containing projecting eaves and cutout brackets
• Low pitched roof with rafter tails
• Grouped windows, often with 8 over 1 double hung sash
• Clapboard siding
• Built in cupboards 

The typical Ardsley Park bungalow is under 2000 square feet and is priced in the the low to mid-$200’s.  While clapboard siding is most frequently associated with the true bungalow, Ardsley Park also boasts a twist on the theme, i.e., brick style bungalows with glorious brick arches and the same interior surprises of built-ins, hardwood floors, banquettes, Arts & Crafts inspired fireplaces & surrounds, and much more.


 

Buyers who are familiar with the style features they prefer are loved by the Realtors who serve them!  Even if a buyer can’t walk up and say “bungalow,” it is highly recommended that he/she builds a picture file (magazine, iPhone, etc.) of the types of style features that are attractive.  With those in mind, the Realtor should be able to match architectural style and zero in on the most likely neighborhoods for consideration.   If you need help determining your “style,” do not hesitate to contact me.  I’m a professional match-maker!

Serene Savannah: A Walk Along Bluff Drive

 













 

 

Savannah is a city by the sea, but the sea is not the only source of waterfront living.  A myriad of tidal rivers and creeks separate the city from the ocean and offer the best of slow, serene living.  One of my favorite streets in all of Savannah is Bluff Drive, which runs adjacent to the Skidaway River on Isle of Hope.  Isle of Hope is not a true island, but is a bluff situated along the Intracoastal Waterway. 

Legends of pirate treasure surround the early days of Isle of Hope.  Records of residents date back to the founding of Savannah in 1733 when Noble Jones was granted a tract on the island that was eventually named Wormsloe, a plantation which is also on the National Register of Historic Places.  The Isle is also home to Bethesda, the oldest still-operating orphanage in the US.  Given its location, the area was perfectly suited to become a defensive battery protecting Savannah from the Spanish.  Another historic site is the Isle of Hope United Methodist Church, which was used as a Confederate encampment.

The history books note that Isle of Hope was established as a retreat against yellow fever outbreaks for wealthy Savannah families in the mid-1800s.  In 1871, a railroad connected Savannah with Isle of Hope and soon thereafter, many families chose to live there year-round.  Isle of Hope has also been named to the National Register, one of the many historic districts in Savannah.  The entire area is around two square miles and today its permanent residents number approximately 2500 Savannahians.  Like no other area in Savannah, Isle of Hope boasts picture perfect cottages side by side with glorious manors and mansions.  The only commercial venture around is the Isle of Hope Marina.

The scenery offers such beauty that the area has been included in several Hollywood films: Glory, Cape Fear (original), The Last of the Belles, Forrest Gump, and The Last Song.

A visit to Bluff Drive calls the visitor out of the car and onto the street for a stroll.  The best way to absorb the beauty is on foot.  Everything that is beloved about Savannah is there:  majestic oak trees covered in Spanish moss; gorgeous vistas of the river, marina, and private docks; and the most interesting collection of Greek Revival, Victorian, Neoclassic, and Craftsman Bungalow styled homes grouped in a single neighborhood.  In addition, several antebellum homes have survived there.  In a world where everyone is always in a hurry, Bluff Drive serves as a reminder to slow down and simply enjoy being alive.  It’s a place where you’ll always finding people out walking and knowing you neighbor is as easy as taking a break aside any of the picket fences.
 

                                                                   



The New Stigmatized Property: Homes in a Flood Zone

A couple of weeks ago, I had a real estate closing scheduled for a great property in a southside Savannah neighborhood.  Inspections were completed, the loan was approved, and a week before the closing, my Buyer asked me to get him out of the deal.  It was the first time that had happened in 13 years.  Why did we terminate?  Flood insurance. 

What happened?  The neighborhood is landlocked.  There are no rivers, streams, or even lagoons in sight.  However, the City has a drainage canal running through one section of the subdivision near the home.  During the “due diligence” period, the Buyer researched the canal.  We also searched available on-line resources about the flood zone.  The Seller did not have flood insurance, but we soon determined that the home did indeed have a small portion of the back yard (not the house) in a designated AE flood zone.

The flood insurance premium for homes in “high risk” zones, i.e., those designated with the letter A or V, are based on a building’s elevation above, at, or below the Base Flood Elevation (BFE) set for the zone.  Generally, the higher the building is above the BFE, the lower the premium.   To determine the exact premium (set by FEMA), a Flood Elevation Certificate, prepared by a licensed surveyor is required.  The process of finding or generating a Certificate is not difficult.  However, the rules of the flood insurance game changed with the Congressional passage of the Biggert-Waters Flood Insurance Reform Act of 2012.    

 

Although the B-W Act was passed last year, the implementation is just now rolling out.  In a nutshell, Buyers can no longer assume an existing homeowner policy or “grandfather” a policy.  In fact, the Act will eliminate the subsidy for flood insurance that has been provided by the federal government for years.  On October 1 of this year, over one million US policies will be subject to 25% PER YEAR premium increases until the premiums are increased to full risk rating.  These increases can range from a few hundred to tens of thousands of dollars per year.

In the case of the closing that was terminated, the Buyer was facing a 2013 policy premium of $800/year, with annual increases until the premium grew to $5,000/year.  In other words, his mortgage payment was destined to be $800/month but, ultimately, the flood insurance would add another $400/month, destroying the affordability of the home.  The loss of the home was tough on the Buyer, but the prospect of a potential future foreclosure due to the increasing expense of flood insurance would have been tougher.

In the Savannah area market, approximately 20% of the homes actively listed require flood insurance.  What should a Seller do?  Those who live in a flood zone may now be holding “stigmatized” property, with Buyers ruling those homes out of consideration.  Many of the desirable waterfront properties in Savannah may languish on the market indefinitely or reduce prices to achieve some measure of competitiveness.

Sellers should immediately contact their insurance providers and get more details about how premiums for their homes will change.  Many Sellers do not have updated Elevation Certificates that meet today’s requirements for writing a new policy.    In the Savannah market, this will become a hotly negotiated term of any future transaction.

Occasionally, changes in the law and federal programs have resulted in unintended consequences.  On the heels of some measure of local Savannah area real estate market improvement, the changes associated with the National Flood Insurance Program may cause setbacks.  If you need more information on the changes, or need a referral to knowledgeable insurance providers or surveyor, contact me for assistance.

First Time Home Buyers: Managing Expectations

As rates continue to ride the roller coaster, First Time Home Buyers are challenged with having proper expectations related to the type of homes available and the value one can get for the money.  In the Savannah area market of Chatham, Bryan, and Effingham Counties, First Timers tend to shop in the “up to $150,000” price range.  Based on current mortgage rates and typical insurance and property tax expense, a home at the top of the range would translate to an $1100/month mortgage commitment.  The average price of July sales in the First Timer price range was $96,722 and is equivalent to around $800/month, far surpassing the affordability of most area apartments offering smaller spaces and fewer notable home features.

 So, what can a First Timer expect to buy?  In July 2013, there were a total of 161 sales of homes (32% of all sales) up to $150,000.  The typical home profile:

 

# Bedrooms	Three
# Baths	Two
Average Square Footage	1426
Average Sales Price	$96,772
Average Price/SF	$68.30
List Price/Sales Price	96%
Average Days on Market	84

 

As one would expect, the “under $50k” group were foreclosures needing fairly significant work.  Occasionally, a good prospect for the stalwart First Timer will arise.  Generally speaking, though, most First Time Buyers use either VA or FHA for financing.  VA does not have a repair escrow option; the FHA loan type does, but the process is often daunting for buyers who are more experienced.

The majority of the second category of “$50-75k” were fixers as well, but the upper end of the range included move-in ready homes in nice neighborhoods.  Above $75,000, the choices were abundant and included move-in ready re-sale properties as well as new construction.  A wide variety of styles were available as well.

The bottom line? Homes are still affordable in the Savannah market.  Getting a bargain does not mean that the buyer has to be a hard-line DIY-er.  However, taking advantage of the market in the entry price level does require a sense of urgency and a set of reasonable expectations.  I’d be delighted to walk you through the process.